Google cut off Megaupload’s ad money voluntarily back in 2007

SOPA backers have trashed Google for months, saying that the company just …

The federal government's 72-page indictment of file hosting site Megaupload is stuffed with odd bits of information. Take page 34, for instance, which features a single paragraph about Google's AdSense program. It reads:

On or about May 17, 2007, a representative from Google AdSense, an Internet advertising company, send an e-mail to [Megaupload founder Kim] DOTCOM entitled "Google AdSense Account Status.” In the e-mail, the representative stated that “[d]uring our most recent review of your site,” Google AdSense specialists found “numerous pages” with links to, among other things, “copyrighted content,” and therefore Google AdSense “will no longer be able to work with you.” The e-mail contains links to specific examples of offending content located on Megaupload.com. DOTCOM and his conspirators have continued to operate and financially profit from the Megaupload.com website after receiving this notice.

Sometime later, Megaupload launched an internal advertising agency so that it collect even higher amounts of cash from placing ads on its download pages.

But the paragraph is more interesting for what it tells us about Google. Policy wonks may remember that the company has been absolutely vilified in recent months for taking advertising money from pirates, counterfeiters, and other unsavory characters. The implication—and sometimes it's far more than an implication—is that Google opposed recent legislation like the Stop Online Piracy Act (SOPA) only because it couldn't pass up the sweet nectar of forbidden cash.

Dirty pirates

Such criticism doesn't come simply from copyright holders; it goes all the way to the top. At a remarkably one-sided anti-Google hearing on SOPA last year, the chairman of the House Judiciary Committee eviscerated Google in his opening statement, contrasting it with “responsible companies." Take it away, Lamar Smith (R-TX):

Another one of the companies represented here today has sought to obstruct the Committee’s consideration of bipartisan legislation. Perhaps this should come as no surprise given that Google just settled a federal criminal investigation into the company’s active promotion of rogue websites that pushed illegal prescription and counterfeit drugs on American consumers....

The company also disregarded requests to block advertisements from rogue pharmacies, screen such sites from searches and provide warnings about buying drugs over the Internet... Given Google’s record, their objection to authorizing a court to order a search engine to not steer consumers to foreign rogue sites is more easily understood.

Hollywood has been beating the same drum ever since. The Directors Guild of America, the Teamsters, and others authored a recent letter supporting SOPA. In it, they wrote:

We are well aware that opposition voices, funded and encouraged by a few enormous Internet companies like Google that stand to lose billions in illicit profit (as shown by Google’s willingness to pay a $500 million fine for knowingly placing ads on illegal pharmaceutical sites), if the bills are allowed to become law, have grown louder and shriller in an effort to sway public opinion and derail the political process. They have successfully diverted support from the bills by blanketing the Internet with mistruths and lies and using fear tactics and blacklists to overwhelm and intimidate those who should stand up for protecting American creativity and American workers.

Just yesterday, MPAA boss Chris Dodd talked about how "hurt" he was about SOPA criticism in an interview with the Hollywood Reporter. But it wasn't long before he was taking whacks at Google's finances.

Obviously what happened is those—particularly Google—who are opposed to the legislation, they don’t want [the law] to happen because [search related to piracy is] a major revenue raiser for them, not because of freedom of speech or breaking the Internet. They make a lot of money off that and I understand they don’t want to be hurt economically.

Google responds

Google policy counsel Katherine Oyama tried to fight back against this perception at the hearing, saying that Google spent more than $60 million in 2010 alone to police bad ads, and that the company voluntarily took action against 12,000 sites in 2010 and another 12,000 in 2011 for violating its ad policies on infringement.

The Megaupload indictment appears to show that Google proactively took measures against the site as far back as 2007—even though the account must have been generating quite a bit of money. (While most of the $175 million in alleged Megaupload revenues came from subscriptions, $25 million came from ads.)

This isn't to say that Google is some sainted company. Critics rightly point to the fact that it agreed to forfeit $500 million to the government over advertising it accepted for illicit online pharmacies. It ditched its hardcore net neutrality allies to do a deal with Verizon. And its "don't be evil" motto has been violated time and time and time again.

But some of the criticism has turned into Google Derangement Syndrome; as the government's own indictment shows, Google has for years made (yes, sometimes inconsistent) efforts to address infringement and counterfeiting using its ad programs. Trying to pretend that this debate is solely about Google's piratical cash hoard, or that Google is the only entity that opposed SOPA, is exactly the kind of hyperbole that SOPA backers now say they want SOPA opponents to abandon.

I really doubt that Google generates that much revenue from piracy. More than likely, if that piracy wasn't occurring, they would have been profiting ANYWAYS due to people being on other sites with Google ads. This is the Hollywood elites trying to create a bogeyman to be the evil face of the anti-SOPA movement.

Of course this information would be quite inconvenient for the people backing SOPA. As with everything else in DC, facts are secondary as it's preferable to use knee-jerk "omg the world is ending" scenarios to push crap legislation through. (bribes help also). ;-)

goreproductions: That is a fantastic idea! Sadly, the MPAA and RIAA would waste no time taking Google to court for that. But these industries prefer litigation over competition, it's the new Capitalism now.

I really doubt that Google generates that much revenue from piracy. More than likely, if that piracy wasn't occurring, they would have been profiting ANYWAYS due to people being on other sites with Google ads. This is the Hollywood elites trying to create a bogeyman to be the evil face of the anti-SOPA movement.

Yep, it basically boils down to that horrifically incorrect causality assumption the MPAA / RIAA keep coming up with. Piracy doesn't lead to a 1:1 ratio of declining profits. In google's case, if there wasn't piracy, people would still see addwords on whatever sites they visited instead (they're not going to stop using the internet just because they can't pirate stuff). In the economical sense, 1 downloaded copy of song X doesn't equal $1 of lost profit for the RIAA. Its a horrible assumption and it just amazes me how ignorant congress can be to believe it. There's no factual basis on any of it. And movies.... well, the MPAA basically punishes people who buy DVDs / Blu-Rays these days. 20 minutes of commercials before you get to watch your film. Stop making it so damn irritating to do things legally and people will actually buy your ****

On that note, I've been considering getting a Blu-Ray player recently. Does anybody know of one that has a "bug" that causes it to ignore the control lockout codes so you can bypass the ads at the start of a disc? It's really ridiculous how long some DVDs make you wait until they let you fast forward or go right to the menu. It's also ironic that I'm being punished for being a good consumer instead of pirating the movies.

Here is the real crux. Even if you come up with a SOPA/PIPA alternative that supposedly only targets sites designed primarily for piracy, someone can argue that any site that allows user content is designed primarily for piracy. Viacom is arguing in court right now that is the entire purpose of YouTube. Members of the House ripped Google for being pro-crime. They seem to fear that everything on the internet is seedy. I can't trust that any bill would be able to correctly identify true dedicated piracy sites, and not target something like Livejournal simply because they have communities that link to copyrighted content.

Lamar Smith is saying we need a new approach for the SOPA bill, but what he doesn't understand is that legislation is completely the wrong approach. He states that $100 billion dollars is lost every year due to foreign piracy. Can anyone substantiate that number?

I've maintained for years that IP is perhaps our best export. But just because the retail price on The Hangover 2 BluRay is $35, that doesn't mean the US economy lost $35 when someone in Russia downloaded a digital copy from the internet.

I would say that we have room for growth if we can monetize markets where American IP is consumed, but not paid for. Breaking the internet won't fix that. I'm not sure any US legislation will change that. The media companies need to put a service on the market that will convince consumers to pay.

Region locking service like Amazon Prime, Hulu, Netflix, etc. is a step in the wrong direction. When we tell consumers outside the US that we don't want to give you the ability to pay for content, we're outright encouraging them to pirate.

This isn't to say that Google is some sainted company. Critics rightly point to the fact that it agreed to forfeit $500 million to the government over advertising it accepted for illicit online pharmacies.

That they gave the government half a billion doesn't mean they were in the wrong either ethically or legally. It just means that they found that the best way to handle the issue.

MGM is near bankrupt to the point that they stopped production on the new Bond movie for over a year, and couldn't get The Hobbit rolling until they borrowed a few hundred million dollars.

Why doesn't Google buy a movie studio that has financial trouble (United Artists might be another good target) and then try to put their own spin on content creation. Enable filmmakers/artists without getting in their way. Prioritize digital distribution. Pay fair royalties. Enable smaller filmmakers to get their shot with smaller budgets and digital distribution rather than focusing solely on $200 million dollar tent poles.

Can you imagine what would happen if guys like Spielberg, Jackson, Lucas, Cameron, Soderberg, etc. moved shop to a Google umbrella of film making?

MGM is near bankrupt to the point that they stopped production on the new Bond movie for over a year, and couldn't get The Hobbit rolling until they borrowed a few hundred million dollars.

Why doesn't Google buy a movie studio that has financial trouble (United Artists might be another good target) and then try to put their own spin on content creation. Enable filmmakers/artists without getting in their way. Prioritize digital distribution. Pay fair royalties. Enable smaller filmmakers to get their shot with smaller budgets and digital distribution rather than focusing solely on $200 million dollar tent poles.

Can you imagine what would happen if guys like Spielberg, Jackson, Lucas, Cameron, Soderberg, etc. moved shop to a Google umbrella of film making?

It would really be kind of funny if Google just cut off all searches for Hollywood films & music from Hollywood.Censoring those who want to Censor and also who trashed Google.

Better idea is to get the MPAA to HELP them do this. Go to them and ask "provide us with a list of titles for your movies for us to filter so we don't link to pirates". When they get the list and filter every single query/result for that, the MPAA might just realize how much they shot themselves in the foot.

Ah, I love the quote by the teamsters/MPAA/cronies about how Google, through alleged misinformation is trying to derail the political process. Of course, they say nothing about the money they use to <bribe> educate politicians which outright subverts it.

Perhaps in this case, assuming their stance is true, two wrongs DO make a right...

Here is the real crux. Even if you come up with a SOPA/PIPA alternative that supposedly only targets sites designed primarily for piracy, someone can argue that any site that allows user content is designed primarily for piracy. Viacom is arguing in court right now that is the entire purpose of YouTube. Members of the House ripped Google for being pro-crime. They seem to fear that everything on the internet is seedy. I can't trust that any bill would be able to correctly identify true dedicated piracy sites, and not target something like Livejournal simply because they have communities that link to copyrighted content.

Lamar Smith is saying we need a new approach for the SOPA bill, but what he doesn't understand is that legislation is completely the wrong approach. He states that $100 billion dollars is lost every year due to foreign piracy. Can anyone substantiate that number?

I've maintained for years that IP is perhaps our best export. But just because the retail price on The Hangover 2 BluRay is $35, that doesn't mean the US economy lost $35 when someone in Russia downloaded a digital copy from the internet.

I would say that we have room for growth if we can monetize markets where American IP is consumed, but not paid for. Breaking the internet won't fix that. I'm not sure any US legislation will change that. The media companies need to put a service on the market that will convince consumers to pay.

Region locking service like Amazon Prime, Hulu, Netflix, etc. is a step in the wrong direction. When we tell consumers outside the US that we don't want to give you the ability to pay for content, we're outright encouraging them to pirate.

Though this has basically all been said before, it's absolutely worth saying again. The more who knows, the better.

Xipher wrote:

Better idea is to get the MPAA to HELP them do this. Go to them and ask "provide us with a list of titles for your movies for us to filter so we don't link to pirates". When they get the list and filter every single query/result for that, the MPAA might just realize how much they shot themselves in the foot.

If it does come to that, a zero tolerance policy would be the best. If they hate the net so much, just don't even let them on--let any media tied to these asshats die in absolute obscenity. The creators who leave the old guard behind to join the rest of the world online in the 21st century will have to learn to play by the new roles.

Just how bad were these "illicit" online pharmacies? My understanding is that they were just canadian pharmacies and were selling drugs for cheaper than in the US. I'd imagine the lack of medical overview would be the biggest real issue but I can't blame people trying to get important medicine for a fair price. I bet that the US pharmaceutical companies were pissed someone wasn't paying their highly inflated "market price". Seems to me that placing ads for these "illicit" pharmacies isn't quite a big of a deal some in congress and the MPAA make it sound but correct me if I'm wrong.

Why haven't the studios created an online easy to use database of who owns the rights to what that companies such as Google can use via API to identify copyrighted material? It could use an algorithm to create a unique hash for each media and distribute the tool freely so even if the filename was different the tool would identify it based on audio/video/text. Like a digital dna for each piece of media. Even better would be letting people find out who has the rights to something and let them contact/buy the rights from the site. Like ebay for copyrights. Oh wait its easier to throw money at congress than come up with a technical solution apparently.

Why haven't the studios created an online easy to use database of who owns the rights to what that companies such as Google can use via API to identify copyrighted material? It could use an algorithm to create a unique hash for each media and distribute the tool freely so even if the filename was different the tool would identify it based on audio/video/text. Like a digital dna for each piece of media. Even better would be letting people find out who has the rights to something and let them contact/buy the rights from the site. Like ebay for copyrights. Oh wait its easier to throw money at congress than come up with a technical solution apparently.

Thats still a really complex solution.I would rather they put a small tax on internet and tv bills that is paid to the MPAA and RIAA in exchange for the end to all lawsuits, litigation, new laws, and whining. Then someone show them how to fight piracy by being more competitive with pricing and access for digital content. Time to update those business models to the 21st century.

On that note, I've been considering getting a Blu-Ray player recently. Does anybody know of one that has a "bug" that causes it to ignore the control lockout codes so you can bypass the ads at the start of a disc? It's really ridiculous how long some DVDs make you wait until they let you fast forward or go right to the menu. It's also ironic that I'm being punished for being a good consumer instead of pirating the movies.

yes.. its called VLC and it can be downloaded to your computer. just get the blue ray ROM equipped computer or upgrade your old one with one, then use VLC. have fun. If you still looking for a stand alone, I would say that you are better off with one that plays mkv formatted files and rip your own. until they give me a stand alone that lets me play stuff the way I do on my laptop (which has hdmi outputs) I refuse to buy those things.

I am all for copyrights, so long as they are time limited in a sensible manner, pretty much the rest of copyright laws are ok in my mind, but the effective perpetuity of them is the real problem. the distribution issue of the companies is a problem that has to be dealt with in the market place, that unfortunatly isn't what Hollywood/media companies (like all the major news site owners) want or will do. As Heinlein said:

"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back."

I am all for copyrights, so long as they are time limited in a sensible manner, pretty much the rest of copyright laws are ok in my mind, but the effective perpetuity of them is the real problem. the distribution issue of the companies is a problem that has to be dealt with in the market place, that unfortunatly isn't what Hollywood/media companies (like all the major news site owners) want or will do. As Heinlein said:

"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back."

I'm not opposed to copyrights at all (or patents, for that matter). However, I think it's more than just the time limits that are wrong in the current incarnation. If I were to write totally new copyright laws, the main tenants I'd follow are:

1) Copyright will be for a limited time (my preference is 10 years) with a one time renewal option of up to 5 years by the original author of the work only.

2) Copyright cannot be sold or transferred to other parties through any means. Only original authors of works will be allowed to benefit from copyright of created works. This will stop fat cat middle men such as record labels from reaping profits from bands/song writers and paying cents on the dollar to the artists for record sales.

3) I'd keep the whole "you have to actively protect your copyrights to maintain them" situation that is currently used; however, I'd make sure there's some form of update or understanding written into the law since in the digital age, it's very hard to police millions of sites world wide. It'd have to be something of a "good faith gesture" for maintaining rights to your copyright in the digital landscape.

4) Statutory rewards would be limited based off proportionality to the cost of the legitimate goods. Such as, a $1 song download cannot be awarded statutory damages of up to $32,000 per song. It'd have to be a reasonable ratio, along the lines of 1:10 or thereabouts.

5) If claims of criminal charges are threatened against any accused of infringing, then all litigation brought against the alleged will have to be done as criminal, subject to higher burden of proof and actual damages compensated--no ability to seek out statutory damages available.

There are some problems with copyright issues on group productions--namely movies. There's no clear-cut single entity (most often) that can claim sole creation of the work. In such cases, it's valid for the fat cat middle men (movie studios) to continue holding the copyrights for the works. However, they'd still be subject to all the other stipulations.

I know it's not probably air-tight in its setup, but I'm mostly going off what I can think of off-hand on how to handle it. I think artists/creators should get compensated, but I think we need to eliminate the predatory aspects of copyright as it stands (both on those profiting from copyright without creating anything for the public directly, and from those that use copyright litigation as a sole means for punishment/income rather than actually having an invested interest in the works themselves as pertaining to the public as a whole).

I think at this point, we need to start ground up with copyright laws to fix them. All these proposed bandages like SOPA and PIPA, and even OPEN Act are not helping the state of copyright any. The technology has changed vastly and in a relatively short amount of time (given the overall length that copyright laws have been in existence). We can't keep patching shit to keep moving forward when the fundamentals are basically Frankenstein's Monsters as they stand. It's time we rebuild the institution of copyright and build it this time with a mind for how technology has changed the game.

Truly, we live in the most free society, when corporations collaborate with government to protect the people, with no interference from judicial oversight. What else had DOJ secretly pressured Google to pull revenue from? Abortionists? Drug paraphernalia? Unions? Gun sellers?

Truly, we live in the most free society, when corporations collaborate with government to protect the people, with no interference from judicial oversight. What else had DOJ secretly pressured Google to pull revenue from? Abortionists? Drug paraphernalia? Unions? Gun sellers?

Truly, we live in the most free society, when corporations collaborate with government to protect the people, with no interference from judicial oversight. What else had DOJ secretly pressured Google to pull revenue from? Abortionists? Drug paraphernalia? Unions? Gun sellers?

On that note, I've been considering getting a Blu-Ray player recently. Does anybody know of one that has a "bug" that causes it to ignore the control lockout codes so you can bypass the ads at the start of a disc? It's really ridiculous how long some DVDs make you wait until they let you fast forward or go right to the menu. It's also ironic that I'm being punished for being a good consumer instead of pirating the movies.

The ads on DVDs are ridiculous. It actually takes less time to start watching a movie on Netflix then it takes to start a DVD.

I find the pro SOPA\PIPA claims impossible to believe. Back before the internet people made tapes when they didn't want to buy the content. I remember people with hundreds of dubbed tapes. People can rent or borrow movies and music from any library or from a service like Netflix or a brick and mortar rental place and copy the media. Their are innumerable ways to scrape it without using the internet. The MPAA's and RIAA's distribution model is obsolete and they refuse to change. As the techdirt article mentioned, Netflix and Spotify don't seem to be having a problem attracting to users to their legal content -because they evolved with instead of against the technology.

I'm utterly confused. Can anybody explain to me how an observer like Google can make any statement like this and why that would be anything offending or grounds for discontinuing a business relationship?

I read "links to ..." which is not the same as unlicensed distribution of copyrighted content, as a search engine like Google should very well know as they link to every web site in the world where most of the content is copyrighted by their creators.

I also read "copyrighted content", which is not the same as "*unlicensed distribution* of copyrighted content."

As I understand it every creative expression is copyrighted by the creator at the moment of creation, no claim required. From there on it becomes a question of whom this copyright is attributed to (transfered to, like in to my employer) or licensed to (given restricted rights to copy/distribute, like in a particular magazine, on a particular website or to a particular group of people).

As the licensing of copyrights can be sliced and diced in any fashion desired, such as only to 80 year old grandmothers, only in Indonesia, only between 2AM and 3AM EST, an outside observer (such as Google) can't determine if the sender of the material has a license to distribute the material to the recipient.

So how can a lawyer at Google make such vage statements and base the termination of a business relationship on.

Don't get me wrong, I'm not defending Megaupload's conduct, as I have no first hand knowledge of it. They may be guilty or innocent, I don't know and I know I can't judge this. But this statement from Google seems awfully inadequate and leads me to speculate that there is some other reasons, such as pressure from other business parties or some government.

I find the pro SOPA\PIPA claims impossible to believe. Back before the internet people made tapes when they didn't want to buy the content. I remember people with hundreds of dubbed tapes. People can rent or borrow movies and music from any library or from a service like Netflix or a brick and mortar rental place and copy the media. Their are innumerable ways to scrape it without using the internet.

This was never a widespread practice to copy rented or borrowed media. Of course there were a few horders but they where rare. Even the worst though had a real cost to the habit as blank mechinical media was a buck or so each and it was time consuming.

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The MPAA's and RIAA's distribution model is obsolete and they refuse to change. As the techdirt article mentioned, Netflix and Spotify don't seem to be having a problem attracting to users to their legal content -because they evolved with instead of against the technology.

Wouldn't Netflix and Spotify be two examples of the ebil MPAA and RIAA changing their distribution models?

What I think you are getting at is you want everything ever produced at 8 bucks a month. This business model will never ever work and still produce new product. It will not even be considered as long as HBO has twice as many subscribers as Netflix.

I'm not opposed to copyrights at all (or patents, for that matter). However, I think it's more than just the time limits that are wrong in the current incarnation. If I were to write totally new copyright laws, the main tenants I'd follow are:

How can you say you are for Copyrights when you make the proposals you make?

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1) Copyright will be for a limited time (my preference is 10 years) with a one time renewal option of up to 5 years by the original author of the work only.

Content producers would love this. Why give JK Rowlings gross points when you can wait 10 years to do the movies? They could have used a US cast which would raise box office more than using a british cast.

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2) Copyright cannot be sold or transferred to other parties through any means. Only original authors of works will be allowed to benefit from copyright of created works. This will stop fat cat middle men such as record labels from reaping profits from bands/song writers and paying cents on the dollar to the artists for record sales.

This would be awesome. Even if a studio wanted to pay you for the rights to make a movie from you book they would lose their job because their work would not be copyrighted.

Its really only the superstars that sold their publishing that get "screwed" if you are average band the lump sum is worth a hell of a lot more than you will ever see.

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3) I'd keep the whole "you have to actively protect your copyrights to maintain them" situation that is currently used; however, I'd make sure there's some form of update or understanding written into the law since in the digital age, it's very hard to police millions of sites world wide. It'd have to be something of a "good faith gesture" for maintaining rights to your copyright in the digital landscape.

You don't have to actively protect your copyright to maintain them. That is trademark. Are you suggesting that trademark have a 10 year lifespan too? I hope so because I want to start to sell some Coca Cola or make some computers and call them Apple Macs.

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4) Statutory rewards would be limited based off proportionality to the cost of the legitimate goods. Such as, a $1 song download cannot be awarded statutory damages of up to $32,000 per song. It'd have to be a reasonable ratio, along the lines of 1:10 or thereabouts.

5) If claims of criminal charges are threatened against any accused of infringing, then all litigation brought against the alleged will have to be done as criminal, subject to higher burden of proof and actual damages compensated--no ability to seek out statutory damages available.

First. If there is criminal charges then the case would be in criminal court using the rules of evidence in criminial law so what are you talking about?

Second. So you want to make it impossible to actually enforce copyright. I am Lil Wayne and I see you infringed 2 of my songs along with 2000 other songs. So at most I can get 20 dollars? Even the artist that is ripped off the most with 100 songs can get back 1000 dollars? You can't even hire a lawyer for this.

I wonder who the devil the next one that they try to blame for piracy online when they know that free is the online payment model of choice for millions of consumers. How on earth can we hate the rightsholders when they make so much content that we love. It is the case that before the ipad revolution publishers thought they were out of business because they so missed the internet boat. But how can a work that is over 100 years past the authors death still be copywrited unless I can read conan on google now?

Why haven't the studios created an online easy to use database of who owns the rights to what that companies such as Google can use via API to identify copyrighted material?

Even with that, it would be harder than hell to monitor 'infringement' and make sure that it was not happening.

The fact is that IN THE REAL WORLD, it is next to impossible to prevent infringement on copyrights. The bottom line is that copyrights have become worthless in the internet age. The copyright owners than have to compete by giving people peace of mind, knowing that there legally downloaded product has some 'added value' and isn't virus infested.